2019Environmental

Report

Make changes for New SMK

Japan has entered a new era, “REI-WA” in this year, 2019.While they are translated in various ways by foreign media, if “REI” and “WA” are taken to signify “order” and “harmony,” respectively, the values of “order” and “harmony” also apply to the attitudes toward the global environment facing the world.The Paris Agreement (an international agreement to mitigate against global warming) calls for all countries and regions to work toward the reduction of greenhouse gases under common rules. The conflicts of interest between developed and developing countries that could not be resolved by the Kyoto Protocol are being overcome with international harmony.At the G20 Summit held in Japan in June of this year, the realization of a virtuous circle of environment and growth, and measures for marine plastic waste were discussed at the G20 Ministerial Meeting on Energy Transitions and Global Environment for Sustainable Growth, the first meeting of its kind to be held at a G20 Summit.Now, people around the world are facing global environmental issues and pursuing a sustainable society while trying to harmonize their values with the environment.We believe that innovative technology and innovation are essential to tackle various global environmental problems.The development of IoT and AI(Artificial Intelligence) technology has revolutionized various fields of society and has great potential for us. In order to connect this to our new business, completely new challenges are being sought without tied to conventional methods.This is the practice of “Challenge courageously for higher

goals without fear of failure” —one of SMK’ s action guidelines. Of course, new challenges are accompanied by difficulties.We do not think it as "unbreakable wall", but rather consider it positively as "a step for creating new values for SMK". And under this belief, we promise to continue to challenge.On the other hand, corporate social responsibility regarding waste discharge is becoming more and more serious. SMK is working on waste management as a cornerstone of all environmental protection activities. The effective use of resources (promotion of the 3Rs) is a natural responsibility of a company, but we will take more responsibility and work on compliance and maintaining the social order more than ever.SMK carries out corporate activities under the management strategy vision "Challenge, Creativity, Solutions".In the field of environmental conservation, SMK also works on developing environmentally conscious products and creating environmental business markets and businesses. And, through these activities, SMK will continue to work hard to grow into a company that contributes to the future in harmony with the global environment and society.

Top Message

President, Chief Executive Officer and Chief Operating Officer

Yasumitsu Ikeda

1 Environmental Report 2019

Name 　　　　　　　　SMK CorporationEstablished April 3, 1925Primary Businesses Manufacturing and sales of electronic components for use in electrical equipment,

communications equipment, electronic equipment, industrial machinery, IT equipment and other applications.

Capital 　　　　　　　　7,996 million yenNumber of Employees 5,828 (in the Group)Head office 5-5, Togoshi 6-chome, Shinagawa-ku, Tokyo 142-8511, Japan 　　　　　　　　　　　　　TEL: +81-3-3785-1111 FAX: +81-3-3785-1068　URL: https://www.smk.co.jp/Major Products High-frequency coaxial connectors / FPC-to-board connectors / Board-to-board

connectors / Jacks / Remote controls / Switches / Wireless modules / Camera modules / Resistive touch panels / Capacitive touch panels

Message from the Management 1

Corporate Profile 2

Environmental Management 3

FY2018 Environmental Conservation Activities 4

Material Balance 4

Energy and Resource Saving Results 5

Environmental Accounting 6

Environmental Conservation Activity Reports 7

Creation of Environmentally Friendly Products 10

Reporting period　FY2018 (April 1, 2018 – March 31, 2019)Scope of calculations　SMK Corporation (nine sites in Japan) and consolidated subsidiaries (three in Japan and 18 overseas)CO₂ emissions Electric CO2 emission factor for domestic sites: The Electric Power Council for a Low Carbon Society. Electric CO2 emission factor for overseas sites: 2005 – 2011: Subject to the standards of the IEA (International Energy Agency), from 2012: Subject to the standards of the DEFRA (Department for Environment Food & Rural Affairs). CO2 emissions for fuels are subject to the standards found in official announcements by the Ministry of the Environment. In addition, data for past fiscal years was corrected by updating CO2 emission factor.Access to corporate information　Our website discloses data profiling our company, IR information, product descriptions, and past environmental reports. https://www.smk.co.jp/

About this Report

Contents

Corporate Profile (as of March 31, 2019)

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SMK Environmental Charter1. Basic PhilosophyThe SMK Group pursues environmental conservation as well as economic development by integrating its current technological strengths and creating advanced technology. As a good corporate citizen, every one of us will contribute to the promotion of sustainable global development.

2. Action Guidelines（1）Develop environmentally friendly products（2） Reduce waste by using everything to its fullest extent（3）Preserve natural resources and saving of energy（4） Encourage 3R (reduce, reuse, and recycle)（5） Realize waste-free procurement and manufacturing

In SMK, the Group policies, targets, and initiatives related to environmental conservation are deliberated upon and determined by the Environmental conservation Committee, which is chaired by the Vice President of the Environment Division. Major items are subject to deliberation and determination at the Executive Officer’s Meetning. Upon determination, they are deployed at all Japan and overseas works. At each business site, the Local Environmental Conservation Committee decides local policies, targets, and initiatives in accordance with the Group policies, targets, and initiatives taking locally specific issues into consideration and puts them into practice.

SMK has an ISO 14001-based environmental management system in place in all its production facilities, domestic and overseas.Since fiscal 2007, in addition to individual activities at each site, we have been setting targets and themes to be shared by all members of the SMK Group, reinforcing linkage among our sites, and working to strengthen group-wide systemic arrangements. SMK’s environmental conservation activities are not limited to our Group. The Green Procurement Guidelines that we published in 2004 also make demands on our business partners. Specifically, we request our business partners to pledge not to use any environmentall hazardous substances prohibited by SMK, and to put in place ISO 14001-based systems. We visit business partners who have not obtained ISO 14001 certification to check on the status of their environmental conservation activities, and to suggest any necessary improvements.

Members of the EnvironmentalConservation Committee

at each business site

Organizational Structure for Environmental Conservation

Executive Officer’s Meetning

CSR Committee

Environmental Conservation Committee

* Chairperson: Vice President of Environment Div.* Secretariat: Environmental Protection Dept.

PresidentOrganization to Promote Environmental Conservation

Environmental Management Systems

Environmental Management

Environmental hazardous substances auditor training（SMK Electronics (Phils.)Corporation）

Energy saving patrol (Toyama Works,Japan)

Waste disposers inspection(Hitachi Works,Japan)

Emergency drill (Head Office)

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At SMK, we work to track, analyze, and reduce the material balance (environment footprint) of each process throughout the Group, from product design and development to manufacturing and sales.

Preventing Global Warming The initial plan could not be achieved at some overseas works, because of the electricity consumption increased with the launch of new project products, and CO2 emissions per unit of output and total CO2 emissions increased simultaneously.Conserving Biodiversity SMK-J held an environmental learning course for elementary school children in the neighborhood. Through this course, they understood the relationship between environmental conservation and biodiversity and its importance.Effective Use of Resources As a result of promoting waste removal activities called "MUDA-tori activity" in their manufacturing process, they could achieve plans for both the CO2 emission per unit and

the total CO2 emissions. However, the amount of landfill disposal increased because local contractor who had previously outsourced waste recycling have withdrawn from the business in Philippines. Recruitment of new recycling contractor is urgently required.Effective Responses for the Management of Environment-related Substances Continued registration of new material configuration data, and realized the enhancement of our product chemical substance survey system.Strengthening Eco-friendly Design Approach Changes were made to our management system to integrate product assessment and eco-products.

FY2018 Environmental Conservation Activities

Material Balance

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Energy and Resource Saving ResultsSMK aims to improve efficiency of its energy usage as an important management policy to help prevent global warming. We are also working to reduce the discharge of industrial waste and achieve zero emissions (i.e. zero landfill waste) by using out resources more effectively.

Energy-Saving Results Year on YearJapan

105％

91％

Overseas

103％

107％

Overall SMK Group

107％

105％

CO₂ emissions per unit of production value (nominal production value)CO₂ emissions

Resource-saving Results Year on YearJapan

93％

85％—

Overseas

97％

99％171％

Overall SMK Group

96％

96％171％

Industrial waste discharge per unit of production value (nominal production value)Overall industrial waste discharge amountLandfill waste amount

26,79928,705

34,95932,524 31,889 32,866

32,64333,19431,531 32,530

33,697

29,51328,64027,52329,36128,436

29,22228,317

28,557

29,79623,87421,605

33,530

29,236

4,2944,1843,8904,0083,8334,2073,6443,5723,9675,1634,8315,194

0.84

0.60

0.20

32,708

28,186

4,522

0.87

0.60

0.200.160.190.190.170.15

0.110.100.100.100.110.13

0.470.540.51

0.640.59

0.510.460.43

0.380.350.36

0.660.720.69

0.991.02

0.910.86

0.80

0.69

0.600.64

34,186

30,072

4,114

0.90

0.64

0.21

35,048

31,019

4,029

0.89

0.64

0.21

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Environmental conservation costs : Compared to the previous fiscal year, in FY2018 investments for environmental conservation increased significantly and expenses decreased.The reason for the increase in investment amount is the introduction of a smoke exhaust system at some overseas works, based on the strengthening of local laws.Economic Benefits : Economic benefits for FY2018 increased from the previous fiscal year. This was the result of an increase in sales revenue of waste with value at overseas works, the effect of reuse of production equipment, and the effect of the sale of electric power generated by photovoltaic power generation systems.Environmental Conservation Benefits (Reduction of waste) : As for environmental conservation benefits, although industrial waste discharge per unit of production value decreased as a result of its environmental improvement activities, but the CO2 emissions per unit of production value , the amount of landfill waste and the amount of generated environmental hazardous substances all worsened.

Environmental Conservation Costs and Benefits

Environmental Accounting

▼Ibaraki Prefecture

▼ Philippines Factory

▼Gunma Prefecture

Photovoltaic power systems owned by SMK and subsidiaries generated 1.26 million kWh of electricity in FY2018. The CO2

reduction effect was 400 t-CO2.

Actual results of Power Generation at photovoltaic power systems

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Environmental Conservation Activity Reports

We have been donating school chairs produced within our company from used wooden pallets to local elementary schools. In 2018, we visited two elementary schools and donated 50 school chairs as well as three sets of waste bins and dustpans made from empty cans to each school. The school chairs had a table attached on the right side normally, but we were concerned that it might be difficult for left-handed students to sit in this position for long periods of time while writing, leading to back problems. So, this time we also produced eight chairs with the table attached on the left side.

Effective Utilization of Resources

Donation of school chairs made from used wooden pallets

As we progressed with the shift to LED lighting at our factories in the Philippines, we had many fluorescent lights left over that could still be used. So, in June 2018 we donated 50 used fluorescent lights to a local primary school through a project run by elementary school students’ parents and guardians aiming to establish an improved learning environment for their children. Prior to this, the elementary school classrooms and hallways were dimly-lit spaces lacking sufficient lighting. We were able to assist in giving these children a better school life.

Donation of used fluorescent lights

SMK Electronics　(Phils.)

Corporation

Donation of Waste Material

HeadOffice

In August 2018, jointly with the Shinagawa Ward Environmental Information Activity Center, we held Introduction of Environmental Conservation Activities and Hands-on Manufac tur ing Experience. This program, which is held ever y summer, teaches children the importance of environmental conservation and the fun of hands-on manufacturing. This time, 20 local primary school children and their families participated.

Introduction of Environmental Conservation Activities and Hands-on Manufacturing Experience

7 Environmental Report 2019

In August 2018, we conducted a factory tour for the families of our employees, and 20 children participated. We gave them a guided tour of our environmentally fr iendly manufacturing site and introduced our environmental conservation activities.

Environmental Communication

Factory tour

In October 2018, the Environmental EXPO 2018 was hosted by the government of Baja California, with over 15,000 people in participants. Twenty-five SMK Mexico employees participated and gave a presentation and workshop about reducing plastic waste.

Environmental EXPO 2018

SMK Electronics

(Dongguan) Co., Ltd. (China)

In July 2018 we held a summer camp for families of employees, with 60 children participating. During this fun program of events, we conducted time to consider the importance of the global environment.

SMK Summer Camp

SMK Electronica S.A. de C.V.

(Mexico)

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Environmental Conservation Activity Reports

In order to provide safe drinking water for our employees, we have introduced equipment for purifying tap water and treating it with UV light. The water we produce in this way has been certified as hygienic for public consumption, and we carry out water quality inspections regularly.

SMK Group is actively engaged in community cleanup activities.

SMK group companies recognize as “ Water also one of our important resources” , and are promoting activities such as regular inspections of water leaks in water supply facilities, reuse of factory drainage, and educational activities for water conservation.At the same time, we share the beneficial activities of each works within the group and raise the level of our activity.

Start in-plant production of drinking water

Cleanup activities

Hitachi Works

(Japan)

Toyama Works

(Japan)

SMK Electronics

(Dongguan) Co., Ltd. (China)

Cleanup activities

Water conservation

SMK Electronics　(Phils.)

Corporation

SMK America Group

As a member of the Shinagawa CSR Promotion Association, SMK participated in the Shinagawa Hanakaido flower planting project. A project managed by an NPO, Shinagawa Hanakaido nurtures rape blossoms and Mexican asters which grow along a 2 kilometer stretch of the Katsushima Canal dyke, which makes the area rich in nature and contributes to the creation of a society which is in harmony with nature.

Flower Planting Activity (Shinagawa Ward, Tokyo, Japan)

HeadOffice

SMK Electronics (Europe)

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Creation of Environmentally Friendly Products

LR01 Series LoRaWANR RF Module This is a LoRaWANR certified module. LoRaWan is one of the wireless communication standards called Low Power Wide Area (LPWA). Similarly to Sigfox, it can cover wide area communication with low power consumption, and also features environmentally friendly design and material selection, such as chromium-free material for the shield case.LoRaWAN® read mark is registered trademark owned by LoRa AllianceTM. and any use of mark by SMK Corporation is under license.

This is a switch for wearable devices with a "spring contact system" that can be mounted without using solder. By making it possible to mount the switch closer to the PWB (15% distance reduction compared to our conventional model), we succeeded in making the set thinner and more robust. Because it can be mounted without using solder, this product contributes to environmental conservation.

Mini One Dome Switch

This is a micro USB connector for use in smart phones, mobile telephones, and similar products. This connector use a structure with springs that press against the circuit board to make contact, thus eliminating the need for solder.

Micro USB Connectors (Spring Terminal)

CapBeat Touch-MM Cu Mesh Senser Capacitive Touch Panel with Force Feedback

This is a copper mesh capacitive touch panel with force feedback that enables smartphone-like nimble operation even for large display sizes. In addition to realizing force feedback during input, a feature for which there is strong market demand, this product is an environmentally friendly product because it uses a copper mesh sensor instead of the ITO (indium tin oxide—indium being a rare metal) that is generally used in touch screen sensors.

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